The importance of the right liability limits

With the recent announcements from the Lord Chancellor, do all of your commercial clients have the right employers, public or product liability limits to meet the increased cost of personal injury claims?

Currently, the majority of commercial clients take out the following limits for liability;

Employers liability - £10m (costs inclusive)

Public liability - £1m or £2m

Product liability - £1m or £2m

When considering these limits in relation to the personal injury rate announcements are they still enough? It's vital that your clients consider their Employers & Public Liability limits now

What will the discount rate change mean for Liability premiums?

The discount rate reduction will increase the size of compensation awards for large claims and catastrophic claims. As a result, customers should seriously consider increasing the indemnity limits on their Public Liability insurance and possible Employers Liability, which would mean a rise in their premiums.

Why would you need to increase liability limits?

Here at Aviva, our current largest Employer’s Liability claim is more than double the standard level of cover. As Employers Liability cover is costs inclusive, when a claim runs into millions, £10m generally is not enough cover.

The new personal injury rate will see increases in all liability claims. For example, a 27 year old, whilst cycling on a footpath hit an obstacle and suffered a debilitating head injury. Our original estimate for this claim was £4.5m – its new estimate is now £8.3m

We really encourage you to have conversations with your clients about their levels of liability cover. We can work with you and your clients to get the right level of liability insurance for their business.

How can we help?

Risk management entails understanding, analysing and minimising the threats that have the potential to severely impact a business. By identifying potential risks, assessing the likelihood of their occurrence, and taking appropriate actions to address them, you can prevent such situations from ever materialising. Aviva Risk Management Solutions helps to look at risks that arise in places of work and put into action sensible measures to control them. Whether the business is large or small, effective risk management today means fewer surprises and unexpected consequences in the future. Have a look at our risk management brochure today. If you’d like more information or assistance, please visit Aviva Risk Management Solutions or contact us at riskadvice@aviva.co.uk

We’ll also be able to let you know how much of your book is at £1m limit of indemnity, so your usual underwriter will be in touch soon and how we could increase their liability limits.

If you have any questions about liability cover, please just get in touch with your usual commercial underwriter.